How the green agenda is destroying economies worldwide

A column written by Office of Senator Barnaby Joyce published in the Canberra times this week.

Certain things paint an indelible image in your mind. One happened to me lately when my mother in law told me that whilst doing meals on wheels in winter there was always a place you could find pensioners, in bed. This was not because of an infirmity but because they could not afford the price of the power to stay warm outside bed. How completely self indulgent and pathetic we have become that in our zealous desire to single-handedly cool the planet we have pandered to those who can afford the power bill over those less fortunate to avoid privation. How pathetic we are that South Korea, using our coal, can provide power cheaper to their citizens after an 8,300 km sea voyage than we can with power stations in our own coal fields.

Oh yes, aren’t the solar panels doing a great a job. In Canberra last week it was revealed that they would add $225 to the average electricity bill, and that the Government’s proposed carbon tax would raise them by a further 24%.

It is just that the poverty creep is making its way up the social strata, though I doubt it will reach the most affluent group The Greens. Bitterness on my part I suppose but I represent a party that represents the poorest electorates. Now what other lunacy are we considering, none other than shutting down the Murray Darling Basin so you can have a diet that suits the misery of the winter nights temperature in the unheated house..

Yes we have become so oblivious to the obvious because the loudest voices are not necessarily the neediest. We spend, sorry borrow, for school halls that do not make students more competitive in competency. No school hall taught a student a second language or a higher level maths. We borrowed for ceiling insulation and burnt down 190 houses and 4 installers died.

We borrowed for aimless $900 cheques as we decided that somehow imported electrical goods to Australia would reboot the US economy. We borrowed so much that we are now 170 billion dollars in gross debt. We are told not to worry about gross debt, its net debt that counts. Well try that out on your local bank manager. Try paying him back what you think you owe him, because of what you think others may owe you. Not surprisingly he will direct you to what is noted on your loan statement.

It is funny how the people who try to assuage our concerns with the net debt myth can never clearly identify what are the items that make up the difference between the figure on the Office of Financial Management website as Australian Government Securities outstanding and their miraculous net debt figure.

Since the election, the Labour-Green government has borrowed an average $1.6 billion each week. Every fortnight that amounts to three new major public hospitals or the inland rail from Melbourne to Brisbane. Not bad going for a country that can not keep its pensioners warm.

Whilst we are waiting we are merrily selling at a record rate our agricultural land, mines and now the hub of commerce the ASX, so that when the day of reckoning for or children comes they can try and get out of trouble by working fastidiously for someone else and hoping they feed them. The average foreign purchase of agricultural land over the past two years is 2.7 billion a year or more than 10 times that of the average of the previous 10 years.

So when is all this going to change? When are we going to shake ourselves out of this dystopia that we are inflicting on others less connected but more affected by the self indulgent political delusion. What is our current solution to the very real problems becoming more and more apparent at the bottom end of the lucky country?

Well apparently it is gay marriage. Yep I am sure that will warm the cockles of their hearts, if not their living rooms, that our nation’s wisest are going to engage in hours, possibly days at the end of the political year on gay marriage. Then when we are finished with gay marriage we may have enough time to engage the remainder of our time on euthanasia.

You can not reduce power prices without increasing the supply of cheap power. No other nation has an earnest desire to feed you before they satisfy their own. It is a fluke of history that you are here in this nation but luck is easily lost with bad management and naive aspirations.

Al Gore’s Ethanol Epiphany

Wall Street Journal

He concedes the industry he promoted serves no useful purpose.

Anyone who opposes ethanol subsidies, as these columns have for decades, comes to appreciate the wisdom of St. Jude. But now that a modern-day patron saint—St. Al of Green—has come out against the fuel made from corn and your tax dollars, maybe this isn’t such a lost cause.

Welcome to the college of converts, Mr. Vice President. “It is not a good policy to have these massive subsidies for first-generation ethanol,” Al Gore told a gathering of clean energy financiers in Greece this week. The benefits of ethanol are “trivial,” he added, but “It’s hard once such a program is put in place to deal with the lobbies that keep it going.”

No kidding, and Mr. Gore said he knows from experience: “One of the reasons I made that mistake is that I paid particular attention to the farmers in my home state of Tennessee, and I had a certain fondness for the farmers in the state of Iowa because I was about to run for President.”

Mr. Gore’s mea culpa underscores the degree to which ethanol has become a purely political machine: It serves no purpose other than re-electing incumbents and transferring wealth to farm states and ethanol producers. Nothing proves this better than the coincident trajectories of ethanol and Mr. Gore’s career.

Ethanol’s claim on the Treasury was first made amid the 1970s energy crisis, with Jimmy Carter and a Democratic Congress subsidizing anything that claimed to be a substitute for foreign oil. Mr. Gore, freshman House class of 1976, was an early proponent of what was then called “gasahol.”

The subsidies continued through the 1990s, with the ethanol lobby finding a sympathetic ear in Clinton EPA chief and Gore protege Carol Browner, who in 1994 banned the gasoline additive MTBE and left ethanol as the only option under clean air laws. When the Senate split 50-50 on repealing this de facto mandate, then Vice President Gore cast the deciding vote for . . . ethanol. That served him well in the 2000 Democratic primaries against ethanol critic Bill Bradley.

During the George W. Bush years, Big Ethanol adapted again, attaching itself to the global warming panic that Mr. Gore did as much as anyone to foment. Republicans in Congress formalized the mandate and increased subsidies in the 2005 and 2007 energy bills.

Meanwhile, the greens have slowly turned against corn ethanol, thanks to the growing scientific evidence that biofuels increase carbon emissions more than fossil fuels do. But the boondoggle lives on in dreams for so-called advanced fuels like cellulosic ethanol. Note Mr. Gore’s objection only to “first generation,” though we’ve been hearing that advanced ethanol is just a year or two away from viability for two decades.

At least on corn subsidies, we now have the makings of a left-right anti-boondoggle coalition. Major corn energy subsidies such as the 54-cent-per-gallon blenders credit expire at the end of the year, and Republican Senators Jim DeMint and Tom Coburn are encouraging the new Congress to prove its fiscal bona fides by letting them die. Chuck Grassley (R., Ethanol) responded this week on Twitter: “WashPost reports 2 of my colleagues want sunset ethanol tax credit R they ready sunset tax subsidies oilANDgas enjoys?”

Messrs. DeMint and Coburn replied, essentially, make our day—and rightly so. Regardless of government intervention, the economy will continue to demand oil and gas, because they are useful. No one could plausibly say the same about ethanol, and maybe now that he’s had his epiphany Mr. Gore will join the fight against the subsidized industry he did so much to promote.

Renewable Power Generation – all cost and no benefit!

Introduction

Modern power systems are huge, complex and inherently unstable. Few people understand the problems of ensuring that the total generation in a power system matches the fluctuations in load on a minute by minute basis. If the fluctuations are excessive, the lights go out. Large scale windpower adds to the normal fluctuations.

Compared to conventional power generation, wind has a low capacity factor (the ratio between the average generation and the maximum generation) and an output that is unpredictable. Capacity factors vary from 18 – 20% in Germany and are about 25% in many countries.

Because windpower is unpredictable and seasonal, large-scale windpower needs a technology that will provide low cost and efficient energy storage for periods of days, weeks and months. Without that, it cannot provide the economic and reliable supply we need.

A recent report commissioned by Greenpeace and the European Renewable Energy Council (Europe’s largest renewable energy trading association) claimed that it was possible to replace all United States power generation from coal, nuclear and oil-fired power stations with low cost renewable energy. Most of this renewable energy – wind, plus some solar and ocean – would be intermittent and seasonal.

The authors of the study ignored:
• the huge – and unsolved – problem of storing the energy when it is available so that it can be used when it is needed;
• the very real problems of coping with the unpredictable and rapidly fluctuating output of the windfarms;
• the very high real cost of windpower;
• the cost and problems of the large-scale long distance power transmission that would be needed.

To illustrate these problems I carried out a “clean sheet” study of a notional power system with a peak demand of 10,000 MW at a capacity factor of 60% giving an annual energy demand of about 55,000 GWh pa. I calculated the total cost of supplying this system from nuclear power backed up by hydro pumped storage and compared it with a combination of windpower and large scale pumped storage.

I chose nuclear power because it is “carbon free”, has low fuel costs and the cost is much same all over the world. As the nuclear power option could supply all the load all the time, the same obligation was imposed on the wind powered option.

My calculations showed that the nuclear option needed 7700 MW of nuclear and 3500 MW of pumped storage.

Assuming a capacity factor of 25%, the windpower option needed 31,000 MW of windpower plus 10,000 MW of pumped storage (a total of 51,000 MW) to supply the 10,000 MW of load. At first sight, this looks ridiculous. It isn’t because:
a) the wind farms must generate sufficient energy to supply the load and to meet the 25% losses involved in pumped storage;
b) the pumped storage schemes must be able to absorb all the windpower generated when the system load is low and the wind output is high.

For the purpose of the exercise I chose to ignore the fact that, worldwide there are very suitable sites for these huge pumped storage stations. Note that there is no alternative storage technology available or under development.

I calculated the cost of generation from the two systems. I used the cost of $US4000 per kW for the nuclear power stations quoted in a recent Finnish report. Wind power was costed at $US2250 per kW. This is based on investigations I have carried out into the cost of recent wind farms worldwide. I used a cost of $US1500 per kW for the pumped storage schemes which, from my background in hydropower, is reasonable for schemes with 6 – 10 hours storage.

I made reasonable allowances for the cost of transmission. The costs of operation, maintenance and fuel for a nuclear power plant and windpower was taken from the Finnish report.

My calculations showed that the nuclear powered system would have a total installed capacity of 11,900 MW, would cost about $US46 billion and would supply power for about 9c/kWh. The equivalent wind powered system would have an installed capacity of 51,000 MW, a total cost of $US128 billion and would supply power for about 26c/kWh.

The conclusion is that, on an “apples for apples” comparison, the cost to the consumer of large scale windpower is two to three times as much as nuclear power. Putting it another way, if nuclear power cost $15,000/kW it would still be preferable to wind power!

If the same exercise had been carried out for hydropower stations with seasonal storage or coal-fired power stations instead of nuclear, the result would have been much the same.

The conclusion is:
a) wind power is very expensive;
b) large scale windpower cannot be contemplated until an efficient, low-cost method of storing large amounts of electricity for long periods is discovered. I am not aware of any technology that comes anywhere near to meeting this requirement.

Windpower exists worldwide because of grants, tax breaks and massive subsidies and because, consumers, taxpayers and ratepayers, not the generators, pay for the cost of transmission and backup power stations.

If, as strongly indicated by the current extended sunspot cycle, the world continues to cool, it will not be long before the public realize that that manmade global warming is a myth. When that happens the $750 bn invested worldwide in heavily subsidized renewable energy and carbon trading will rapidly become “sub-prime”. That, not manmade global warming, is the big risk of continuing to subsidise and promote an uneconomic and unreliable source of power.

Game Over In The Carbon War?

By Peter C Glover, Energy Tribune, 22 November 2010

While the next climate summit in Cancun, Mexico at the end of this month will make a show of sifting the geopolitical wreckage from last December’s climate summit, any real prospect for coordinated international action is, post-Copenhagen, dead in the political water. As if that were not enough, the bête noire of climate alarmists, King Coal, is, once again, reigning supreme.

All of which begs the question: with all hopes for a global CO2 impact blown away, why are politicians tenaciously clinging to the fiction that regionalised carbon trading schemes – like the Western Climate Initiative – can succeed where national and international ones have failed?

Speaking to Energy Tribune, Dalibor Rohac, Research Fellow at London’s Legatum Institute which produces the annual Legatum Global Prosperity Index, explains, “If you believe that CO2 emissions are a major factor driving climate change you need to reduce emissions globally. Cutting emissions unilaterally through, say, increasing the price of carbon in one country or group of countries, leads to carbon leakage as carbon-intensive industries will move to jurisdictions where emissions are not restricted.”

Without international and national binding agreements the reluctance of industry to participate is already reflected in the slow death of carbon trading initiatives.

CCX closing – ECX next?

By the end of the year, the Chicago Climate Exchange (CCX), the only U.S. national carbon market which trades all six greenhouse gases, will quietly close its doors to its carbon credits business – the main purpose for which it was set up. Not that this major turning point warranted much coverage in the mainstream media which has made a new genre out of the war on CO2. While the Atlanta-based Intercontinental Exchange only purchased the CCX last April, its voluntary but legally binding system has reportedly ground to a halt in the absence of a federally-enacted cap and trade scheme.

Meanwhile, across the water the European Climate Exchange (ECX), the leading platform for the EU’s Emissions Trading Scheme, is still trading. But when the Kyoto Protocol expires in 2012 with its requirement for mandatory carbon caps, it is widely expected to go the way of its Chicago sister – and a new British report makes clear why.

According to the report by Sandbag, a group calling for even tighter greenhouse controls, the entire five-year period of the EU’s ETS is set to deliver miniscule carbon savings of less than one third of 1 per cent of total emissions. The world’s oldest carbon trading scheme has simply failed to make any serious impact on global carbon emissions, the purpose for which all such schemes exist.

In June 2010, Japan put on hold plans to introduce emission trading laws. Australia has delayed any decision on a carbon trading scheme until 2013 at the earliest and at the Copenhagen conference India’s Environment Minister Jairam Ramesh stated flatly, “India will not accept any emission reduction target – period.”

In North America, however, local politicians still insist that regional initiatives, including the Greenhouse Gas Initiative in the east of the United States and the Western Climate Initiative (WCI) in the west and Canada, could prosper. The WCI, for instance, is a partnership of seven U.S. states and four Canadian provinces. The WCI wants to establish a cap and trade system by January 2012 that, ultimately, aims to reduce regional greenhouse gas emissions to 15 percent below 2005 levels by 2020.

“This is simply puzzling,” says Rohac. “Regional initiatives are unlikely to have any effect whatsoever on global emissions and therefore on climate change.”

Coal’s renaissance

Far from being over the age of coal is experiencing a renaissance. Just as in the West, coal is driving growing economic prosperity of China, India, Brazil and other fast-industrializing nations.

Rohac told Energy Tribune, “Cheap coal and the wide availability of shale gas make decarbonisation in the near future very unlikely. Even if developed countries committed to switch to renewables, this would be offset by the rising emissions in China.”

As our former colleague Robert Bryce recently pointed out, such is the current and prospective growth in coal use that investment bankers, like Tudor Pickering & Co in the U.S., are once again advising there’s plenty of money to be made in buying coal stocks. In 2009, U.S. coal consumption averaged 10 million barrels of oil equivalent (boe) per day – a 52.3 per cent increase over 1973 levels. Over the same period, natural gas consumption increased by just 3.8 per cent and oil by just 3 per cent. The importance of coal to the U.S. economy cannot be overstated. Globally too, coal consumption currently totals around 66 million boe per day, a 107 per cent increase since 1973.

In today’s global commodities market King Coal still reigns supreme. The International Energy Agency projects global coal consumption will increase by more than 50 per cent by 2030. 97 per cent of that increased coal consumption will be in Asia. China is currently opening one coal-fired power station every week, a process set to continue for years to come.

The World Bank meanwhile has been severely criticised for continuing to support investment in coal-fired power stations in places like India and South Africa; in the latter case the electricity produced also serves surrounding countries. The simple fact is that coal is cheap and accessible and a coal-fired power station can be up to eight times more efficient in electricity generation than renewable energy projects.

As the World Bank maintains, it is hard to fight poverty for people without any electricity. Put bluntly, when it comes to the developing world, investment in efficient poverty-eradicating electricity projects ranks morally higher than fighting a war against carbon that is based on a speculative theory, and which is, as the statistics make abundantly clear, already lost.

As Rohac puts it, “Decarbonisation has never been in the interest of developing countries.” But given that the fast-industrialization of the developing nations will continue to eclipse all Western carbon initiatives, it is hard to disagree with Rohac’s assessment that “Western carbon-cutting efforts are mostly a waste of effort and resources.”

Energy Tribune, 22 November 2010

Obama’s Green Deal Isn’t Working
By Michael A. Fletcher, The Washington Post, 23 November 2010

After losing his way in the old economy, Laurance Anton tried to assure his place in the new one by signing up for green jobs training earlier this year at his local community college.

Anton has been out of work since 2008, when his job as a surveyor vanished with Florida’s once-sizzling housing market. After a futile search, at age 56 he reluctantly returned to school to learn the kind of job skills the Obama administration is wagering will soon fuel an employment boom: solar installation, sustainable landscape design, recycling and green demolition.

Anton said the classes, funded with a $2.9 million federal grant to Ocala’s workforce development organization, have taught him a lot. He’s learned how to apply Ohm’s law, how to solder tiny components on circuit boards and how to disassemble rather than demolish a building.

The only problem is that his new skills have not resulted in a single job offer. Officials who run Ocala’s green jobs training program say the same is true for three-quarters of their first 100 graduates.

“I think I have put in 200 applications,” said Anton, who exhausted his unemployment benefits months ago and now relies on food stamps and his dwindling savings to survive. “I’m long past the point where I need some regular income.”

With nearly 15 million Americans out of work and the unemployment rate hovering above 9 percent for 18 consecutive months, policymakers desperate to stoke job creation have bet heavily on green energy. The Obama administration channeled more than $90 billion from the $814 billion economic stimulus bill into clean energy technology, confident that the investment would grow into the economy’s next big thing.

The infusion of money is going to projects such as weatherizing public buildings and constructing advanced battery plants in the industrial Midwest, financing solar electric plants in the Mojave desert and training green energy workers.

But the huge federal investment has run headlong into the stubborn reality that the market for renewable energy products – and workers – remains in its infancy. The administration says that its stimulus investment has saved or created 225,000 jobs in the green energy industry, a pittance in an economy that has shed 7.5 million jobs since the recession took hold in December 2007.

The industry’s growth has been undercut by the simple economic fact that fossil fuels remain cheaper than renewables. Both Obama administration officials and green energy executives say that the business needs not just government incentives, but also rules and regulations that force people and business to turn to renewable energy.

Without government mandates dictating how much renewable energy utilities must use to generate electricity, or placing a price on the polluting carbon emitted by fossil fuels, they say, green energy cannot begin to reach its job creation potential.

“We keep getting these stops and starts in the industry. There is no way it can work like this,” said Bill Gallagher, president of Solar-Fit, a Florida energy company whose fortunes have fluctuated with government incentives in its 35 years in business.

Like many people who run renewable energy companies, Gallagher said he sees no need to expand his 25-employee firm because the business is simply not there.

Full story

Alternative Energy Failure Stories Abound

Climate of Confusion

The feed-in tariff under Ontario’s Green Energy and Green Employment Act, which started as a program of weaning the province off coal power while rebuilding its floundering manufacturing section, has become a muddled mess. Companies which build alternative power plants in Ontario get up to 64.2 ¢/kWh for electricity, nearly ten times the current market value. FIT has sparked a World Trade Organization challenge from abroad, over its made-in-Ontario provisions. Mounting outrage over increasing power bills from consumers has prompted the government to promise to cut electricity rates for consumers (but not for industry which doesn’t vote) by 10% for the next five years. Finally, the opposition Progressive Conservative Party has vowed to scrap the program if elected next October.

Now companies dependent on FIT are wondering whether there will be an alternative energy industry left in Ontario an a year’s time. Some are threatening a class action lawsuit if FIT is abolished.

More.

Eastern Europe Puts Emergency Brakes on Solar Energy

The lower house of the Czech parliament has passed a law that slaps a 26% tax on any revenue from the operation of solar energy projects put into operation since last year. This comes after a solar boom (1034 MW of photovoltaic capacity already installed) raised fears that electricity prices could explode and networks become unstable. While it would have been easier to ditch the renewables obligation, rather than impose a tax, the former would have posed a risk of billions of euros in compensation claims against the Czech Republic.

Neighboring Slovakia amended its Energy Law last May, severely curtailing the potential for solar investment.

More.

Spain’s Solar Power Sector Falls into the Abyss

The Spanish government has launched a new regulatory framework that will result in subsidized tariffs for ground-mounted solar energy projects drop 45% this year, killing future investment in the trade, which industry leaders expect will be frozen in the next few years. The Spanish solar industry has seen investment plunge in the past two years with only 100 MW of generating capacity having been installed in 2009 and 2010 – compared to 2,700 MW in 2008.

The industry is so frustrated that it has sued Spain’s government, arguing that that new regulation is way too harsh and even “unconstitutional” as the tariff cuts are expected to apply to both new and existing projects, meaning the industry may have to make retroactive payments.

Here.

Cancún: Global Climate Consensus Is Disintegrating

The two-week UN Climate Change Conference starts next week in Cancún without much hope of any real success. The Cancún conference follows on last year’s failed effort in Copenhagen and is officially referred to as the 16th session of the Conference of the Parties (COP 16) to the United Nations Framework Convention on Climate Change and the 6th session of the Conference of the Parties serving as the meeting of the Parties (CMP 6) to the Kyoto Protocol. Last year 100,000 people attended the Copenhagen conference; this year about 10,000 are expected in Cancún.

Nations like China believe that they should be allowed increases in CO2 emissions in order to develop their economies, while saying that developed nations should take the lead in drastic emissions cuts, as well as offering funds and technology to developing countries. Events over the past year, starting with the Climategate emails, revealed that the science of climate change is dodgy. The global consensus that at one point a year of so ago seemed unstoppable, that man can influence the fact of, or the speed of climate change and agreement on how to go about the task, seems to be disintegrating.

More here and here.

The New Guard of Climate Questioners: Get Ready for the Next Round of Climate Science Debate

On November 17 the US House of Representatives’ Subcommittee on Energy & Environment held a hearing on climate change titled “Rational Discussion of Climate Change: the Science, the Evidence, the Response.” The Republican invitees were Richard Lindzen, Patrick Michaels and Judith Curry. The first two each presented compelling evidence as to why anthropogenic greenhouse gas emissions might not rapidly push up global temperature—not now, nor in the future. Dr. Curry’s written testimony discussed the “wickedness” of the climate problem, uncertainty in climate science and statements that have resulted in her being labeled a “climate heretic” by her colleagues. Having been duped by the IPCC, Dr. Curry has decided to try to restore integrity to climate science and dig deeply into the broader aspects of the science and the IPCC’s arguments to try and assess the uncertainty.

The full 3-hour and 46-minute hearing can be followed on C-SPAN. The first 18 minutes is taken up by opening remarks by the sub-committee chairman and ranking members. Then there are three panels of witnesses. On Panel 1, Ralph Cicerone of the National Academy of Sciences speaks from there to 0:26 , Dr. Lindzen to 0:34, Gerald Meehl of National Center for Atmospheric Research to 0:39, Heidi Cullen from Climate Central to 0:47. Questions from the sub-committee took until 1:25. Panel 2 consisted of Patrick Michaels of the Cato Institute to 1:32, Ben Santer of Lawrence Livermore National Laboratory to 1:38, Richard Alley of Penn State to 1:43, Richard Feely of NOAA to 1:50. Questions of Panel 2 from the sub-committee took to 2:43. Panel 3 consisted of Adm. David Titley of the US Navy to 2:49:, James Lopez of the Dept. of Housing and Urban Development to 2:55, William Geer of the Theodore Roosevelt Conservation Partnership to 3:03, and Judith Curry of Georgia Tech to 3:09. Questions from the sub-committee took the rest of the time.

More here and here.

Examiner Editorial: Wake up, Washington. Energy independence is close at hand

By: Examiner Editorial 11/21/10 9:05 PM

According to the conventional wisdom, supplies will soon peak and then the U.S. will experience severe declines in the supply of oil and natural gas.Washington’s political class often seems impervious to changing facts. Case in point is the nation’s current and probable future access to essential energy resources, especially fossil fuels like oil, natural gas and coal.

This trio of carbon-based fuels accounts for the vast majority of the nation’s electrical and other forms of power, and will continue to do so through at least 2030, according to the U.S. Department of Energy. The United States is the world’s largest consumer of energy, but is also the world’s most productive economy, so demand here for energy resources is going to continue to grow for the foreseeable future.

According to the conventional wisdom, supplies will soon peak and then the nation will experience severe declines in the supply of oil and natural gas. Thus, the U.S. should invest billions in the development of renewable energy resources and use the power of government to create artificial consumer demand for them by imposing mandates for their use. Energy costs “will necessarily skyrocket,” to use President Obama’s memorable words, but that’s the price the nation must pay in order to achieve energy independence and protect the environment.

When the price of a barrel of oil hit $147 per barrel in July 2008 and Americans were paying as much as $4 per gallon for gas, that scenario seemed reasonable. But it turns out that in the years since, the energy market has experienced profound changes that negate the conventional view. As the New York Times recently reported, “Just as it seemed that the world was running on fumes, giant oil fields were discovered off the coasts of Brazil and Africa, and Canadian oil sands projects expanded so fast, they now provide North America with more oil than Saudi Arabia. In addition, the United States has increased domestic oil production for the first time in a generation.”

The significant news wasn’t restricted to oil. The Times also noted that “another wave of natural gas drilling has taken off in shale rock fields across the United States, and more shale gas drilling is just beginning in Europe and Asia. Add to that an increase in liquefied natural gas export terminals around the world that connected gas, which once had to be flared off, to the world market, and gas prices have plummeted.” The result, according to the Times, is that energy experts now predict decades of residential and commercial power at reasonable prices.”

In other words, the nation can look forward to abundant oil and natural gas supplies at affordable prices for decades to come. As Institute for Energy Research President Thomas J. Pyle puts it, “We can improve our economy, create jobs, and increase our supply of affordable, reliable energy in one fell swoop if the government allows businesses to look for and produce American energy.” Consumers should ask how much longer Washington will continue policies meant to restrict access to these resources.

Read more at the Washington Examiner

End the ethanol subsidies

Congressional inaction would save taxpayers $6 billion, and bring other benefits too

By Paul Driessen

What am I missing? There must be some aspect of our insane energy policies that I fail to appreciate.

“We the People” just booted a boatload of spendthrifts out of Congress, after they helped engineer a $1.3 trillion deficit on America’s FY-2010 budget and balloon our cumulative national debt to $13.7 trillion.

The “bipartisan White House deficit reduction panel” chimed in with a 50-page draft proposal, offering suggestions for $3.8 trillion in future budgetary savings. The proposal targets $100 billion in Defense Department weapons programs, healthcare benefits and overseas bases. It also proposes a $13-billion cutback in the federal workforce and lining out $400 million in unnecessary printing costs.

And yet, amazingly, not even this independent commission was willing to eliminate the $6-billion sacred cow of annual ethanol subsidies. The current 45-cents-per-gallon tax credit for blending ethanol into gasoline automatically expires December 31, as does the 54-cents-a-gallon tariff on imported ethanol. So all senators and congressmen need to do is nothing, and beleaguered taxpayers will save six billion bucks.

We can only hope. Unfortunately, renewable fuel lobbyists is intent on using the lame duck session to perpetuate the special treatment. The National Corn Growers Association, Renewable Fuels Association, Growth Energy, ADM and POET ethanol count as friends incoming House Speaker John Boehner, incoming House Ways and Means Committee Chairman Dave Camp, Senate Majority Leader Mitch McConnell, Senate Finance Committee Ranking Member Chuck Grassley, other influential Republicans and scores of prominent Democrats.

Perhaps if DePuy or Sofamor Danek donates some spinal implants, enough wavering legislators will find the backbone to challenge the subsidizers and ensure a little adult supervision over the budget process. If this election was about anything, it was about ending business as usual, ensuring energy and economic common sense, and not bankrupting the United States.

Ethanol and earmarks represent a key litmus test for Republicans and fiscal conservatives. Failure to hold the line will create a rocky road for credibility and progress next year. It should be an easy decision. It’s time for action – or more accurately, inaction.

Federal laws already require that gasoline be 10% ethanol, and EPA has announced that it will now allow up to 15% ethanol blends for cars and trucks built since 2007. These mandates already require that ethanol use increase from 13 billion gallons today to 36 billion by 2022, ensuring profitable markets for corn growers and ethanol producers, without subsidies. Even large corn ethanol producers like Green Plains Energy now say the subsidies are no longer needed.

The subsidies and tariffs only fatten profit margins, reduce competition, increase consumer prices, cause frayed relations with Brazil over barriers to its sugar-cane ethanol entering US markets, and stifle technological innovation that could improve production efficiencies and lessen environmental impacts.

As Examiner columnist Timothy Carney observes, “the tax credit won’t boost ethanol consumption at all in the future, because the mandate will set demand. So the tax credit will simply subsidize the ethanol that blenders – ie, oil companies – would have bought anyway.”
The corn/ethanol lobby says ending the subsidies would cost up to 160,000 jobs. However, a recent study by leading agricultural economists at Iowa State University concludes that only 300 jobs would be lost. If so, preserving the subsidies works out to $20 million for each job saved.

Meanwhile, says Louisiana State University professor Joseph Mason, the Interior Department’s heavy-handed offshore drilling moratorium could cost up to 155,000 Gulf Coast jobs. That’s on top of countless billions of lease bonus, rent, royalty and tax dollars the US Treasury will never see, because Interior, EPA, Congress and the White House have made billions of barrels of offshore, Alaskan and Lower 48 oil and gas off limits.

America could produce 670 billion gallons of oil (including 480 billion gallons of gasoline and diesel) from a splinter of ANWR equal to 1/20 of Washington, DC. Doing so would generate enormous revenues, instead of requiring perpetual subsidies. By contrast, reaching the 36-billion-gallon biofuel mandate would require 15 billion gallons of corn-based ethanol from cropland and wildlife habitat the size of Georgia, plus 21 billion gallons of “advanced biofuel” from switchgrass grown on additional acreage the size of South Carolina.

Opposition to extending the tax credit and tariffs also comes from a growing coalition of meat and food producers, environmental groups and consumer organizations. They emphasize that cooking corn to power cars increases corn prices, reduces farmland available for other crops, and drives up the price of beef, pork, poultry, eggs, corn syrup and all groceries made with those products. It sends meat and egg producers into foreclosure – and means fewer malnourished people can be fed under current USAID and World Food Organization budgets.

The coalition also points out that growing and processing corn into ethanol requires enormous amounts of water for every gallon of alcohol fuel produced. (Cornell University agriculture professor David Pimental estimates the inputs at 8,000 gallons of water per gallon of corn-based ethanol.) Much of the water comes from already stressed aquifers – and growing the crops results in significant pesticide, herbicide and fertilizer runoff into our rivers, lakes, bays and oceans. It also requires vast hydrocarbon resources, for fertilizers, pesticides, tractors and tanker trucks.

Producing ethanol from sugar cane carries much lower water demands and environmental impacts.

Pro-subsidy factions say $6 billion is pocket change in a $3.6-trillion federal budget. It may indeed be a small step. But all the caterwauling suggests it is a giant step for Congress – and a hugely symbolic one that can no longer be avoided. Moreover, if reductions like this are to be rejected as too trivial to trifle with, how do Nanny State legislators justify their intrusive rules on toilets, washing machines, plastic bags and light bulbs? How do they suppose cash-strapped families balance their budgets?

The ethanol mandates are enough interference in what should be a highly competitive marketplace of ideas and technologies for America’s energy future. Congress should not muddy the waters even further, by extending the subsidies and protective tariffs.

(While they’re at it, the lawmakers should also pull the plug on chicken-fat-to-biofuel subsidies. This tax credit is just another unaffordable, feel-good “green energy” boondoggle – that turns waste fat into wasted tax dollars. Reducing effluent streams, garnering positive PR, and selling their “alternative fuel” to oil companies and the Air Force, under utopian biofuel mandates, ought to be adequate incentive.)
These should be easy decisions. They merely take commitment to principles – something our legislators better start discovering, if they want to be around after the next election cycle.

Paul Driessen is senior policy advisor for the Committee For A Constructive Tomorrow and Congress of Racial Equality, and author of Eco-Imperialism: Green power – Black death.

Wind energy, solar power face cloudy future

By Steve Hargreaves, senior writerNovember 18, 2010: 10:58 AM ET

NEW YORK (CNNMoney.com) — After years of rapid growth and darling status among many in Washington, the future of the American renewable energy industry is uncertain.

That’s because the government cash it has come to rely on may dry up on Dec. 31.

Before the Great Recession, renewable energy developments were helped by a tax credit, worth generally 30% of the cost of the project. When the recession hit, the stimulus package replaced those tax credits with direct cash grants of similar value. Cash is considered more beneficial than credit to the industry.

So far, the government has handed out about $5.4 billion, according to the Energy Department.

Congress could vote to extend the grants, but that’s highly unlikely.

If they’re allowed to expire, incentives for renewable energy will revert to the old tax credits.

“This is not a great place to be in,” said Denise Bode, head of the American Wind Energy Association. “It’s an economic opportunity that will be missed.”

The wind industry is already hurting — even with the cash.

The amount of new electricity wind can generate declined 72% in the third quarter compared to the same time last year, according to the wind association.

World’s largest off-shore wind farm

The wind industry isn’t the only one saying it will suffer.

Without the cash grant, “we’ll grow at a much smaller rate,” said Edward Fenster, CEO of Sunrun, a San Francisco-based company that installs solar panels on people’s homes.

“They’ve ensured that we’re building something new everyday,” he said

Sunrun has 7,000 customers in seven states. The company installs $1.1 million worth of new systems every day, employing 3,000 contractors.

Fenster said the cash grants let him get cheaper loans than the old tax credits, enabling him to reduce the price of the solar energy he sells by up to 25%. He predicts that price reduction would allow him to double his business next year.

But with “cut spending” the mantra on Capitol Hill, slower growth may be the new reality.

“On a gut level, a lot of the conservatives just don’t like to see the government handing out checks to people,” said Kevin Shaw, an energy lawyer at Mayer Brown. “I just don’t see the grant program being extended.”

But the White House does. The Obama administration has proposed a plan: Pay for it by using money left over from the stimulus package. That’s led some analysts to at least give it a shot at passing.

“You have a road map from the White House,” said Whitney Stanco, an energy analyst at the Washington Research Group. “And previously, Republicans have been amenable to using unspent stimulus funds to pay for other priorities.”

A spokesman for presumed Speaker of the House John Boehner wouldn’t get into details about what the incoming house might fund.

He did say that Republicans support all forms of energy development, including renewables and nuclear power, provided that any money for them comes from expanded domestic oil and gas drilling, a prospect that looks dim.

There’s another piece of legislation that could provide support for the renewable industry besides the cash grant — a mandate that would require utilities to buy a certain percent of their power from renewable energy.

About 30 states already have such a mandate, and the industry has been pushing hard for a federal standard of at least 15%.

But most analysts say that while a broader “clean energy” standard that includes nuclear and natural gas may have a slightly better chance of passing, neither idea will gain traction in the next year.

Even absent the cash grants or the requirement to buy renewable power, some analysts say the sector is not doomed.

Michael Hennessy, a wind analyst at Bloomberg New Energy Finance, is predicting wind turbines will add about 8 gigawatts of power in 2011.

That’s up from 5 or 6 gigawatts projected for hard-hit 2010, but below the record breaking 10 gigawatts in 2009.

The country has about 1,100 gigawatts installed from all sources, with wind accounting for the vast majority of what people consider renewable energy.

“It doesn’t bode horribly in our view,” Hennessy said of the cash grants expiring. It’s just not as good as it could be.

Read more here.

California’s Governor Announces Coalition to Fight Climate Change, Promote Clean Energy

GetSolar Staff. Wednesday, November 17th 2010 18:21

Yesterday, California Governor Arnold Schwarzenegger announced the creation of a public-private alliance that endeavors to both address climate change concerns and built the global green economy. The R20, Regions of Climate Action, is a brainchild of the governor.

The R20’s mission is to develop and execute low-carbon and green energy projects through the cooperation of subnational governments from around the world. Through international geopolitical collaboration, the R20 will work to expedite actions in energy efficiency, renewable energy and clean energy, according to the governor’s office.

Commenting on the imitative, Governor Schwarzenegger expressed the importance of the group’s work, telling reporters that there is no time to “wait for national and international movement” on instituting green initiatives. Schwarzenegger affirmed that the role of “subnational governments is more important than ever. California, Schwarzenegger declared, “has shown that state and regional governments can institute” policies that bring about breakthroughs in energy independence and efficiency.

The R20 is a coalition of nations from both developed and developing nations, private institutions and international organizations. The conference in California brought together over 1,500 participants from more than 80 states, provinces and countries.

Read post here.

Electric Vehicles: What’s driving Obama’s subsidies of Chevy’s Volt?

By George F. Will
Sunday, November 14, 2010

“Every single great idea that has marked the 21st century, the 20th century and the 19th century has required government vision and government incentive.” – Joe Biden, Oct. 26

General Motors, an appendage of the government, which owns 61 percent of it, is spending some of your money, dear reader, on full-page newspaper ads praising a government brainstorm – the Volt, Chevrolet’s highly anticipated and prematurely celebrated (sort of) electric car. Although the situation is murky – GM and its government masters probably prefer it that way – it is unclear in what sense GM has any money that is truly its own. And the Volt is not quite an electric car, or not the sort GM deliberately misled Americans into expecting.

It is another hybrid. GM said the Volt would be an “all electrically driven vehicle” whose gas engine would be a mere range-extender, powering the Volt’s generator, not its wheels: The engine would just maintain the charge as the battery ran down. Now GM says that at some point when the battery’s charge declines, or when the car is moving near 70 mph, the gas engine will power the wheels.

The newspaper ads proclaim, “Chevrolet Runs Deep.” Whatever that means, if anything, it does not mean the Volt runs deep into a commute or the countryside just on electricity. At the bottom of the ads, there is this, in microscopic print: “Volt available in CA, TX, MI, NY, NJ, CT and Washington, DC, at the end of 2010. Quantities limited.” Well.

Quantities of everything – except perhaps God’s mercy, which is said to be infinite – are limited. But quantities of the Volt are going to be so limited that 44 states can only pine for Volts from afar. Good, because the federal government, which evidently is feeling flush, will give tax credits of up to $7,500 to every Volt purchaser. The Volt was conceived to appease the automotive engineers in Congress, which knows that people will have to be bribed, with other people’s money, to buy this $41,000 car that seats only four people (the 435-pound battery eats up space).

Mark Reuss, president of GM North America, said in a letter to the Wall Street Journal: “The early enthusiastic consumer response – more than 120,000 potential Volt customers have already signaled interest in the car, and orders have flowed since the summer – give us confidence that the Volt will succeed on its merits.” Disregard the slipperiness (“signaled interest” how?) and telltale reticence (how many orders have “flowed”?). But “on its merits”? Why, then, the tax credits and other subsidies?

The Automotive Engineer in Chief – our polymathic president – says there will be a million plug-in cars in America by 2015. This will require much higher gasoline prices (perhaps $9 a gallon) and much bigger bribes: GM, which originally was expected to produce as many as 60,000 next year, now says 10,000 for all of North America.

GM says that, battery-powered, the Volt has a 40-mile range. Popular Mechanics says 33. Thomas R. Kuhn, president of the Edison Electric Institute, the trade association of the electric utility industry, is, understandably, a Volt enthusiast: This supposedly “green” vehicle will store electric energy – 10 to 12 hours of charging on household current – produced by coal- and gas-fired power plants.

The federal government, although waist-deep in red ink, offers another bribe: Any purchaser can get a tax credit of up to 50 percent of the cost (up to $2,000) of an extra-powerful (240-volt) charger. California, although so strapped it recently issued IOUs to vendors, offers a $5,000 cash rebate for which Volt buyers are not eligible but purchasers of Nissan’s electric Leaf are. Go figure.

In April, in a television commercial and a Wall Street Journal column headlined “The GM Bailout: Paid Back in Full,” GM’s then-CEO Ed Whitacre said “we have repaid our government loan, in full, with interest, five years ahead of the original schedule.” Rubbish.

GM, which has received almost $50 billion in government subventions, repaid a $6.7 billion loan using other federal funds, a TARP-funded escrow account. Sen. Charles Grassley (R-Iowa) called this a “TARP money shuffle.” A commentator compared it to “paying off your Visa credit card with your MasterCard.”

Meretricious accounting and deceptive marketing are inevitable when government and its misnamed “private sector” accomplices foist state capitalism on an appalled country. But those who thought the ethanol debacle defined outer limits of government foolishness pertaining to automobiles were, alas, mistaken.